Malcy’s Blog – Oil price, BPC, PetroTal, Helium One & finally

WTI $52.25 +1c, Brent $55.66 -33c, Diff -$3.41 -34c, NG $2.75 +5c, UK NG 72.6p +6.9p

By Malcolm Graham-Wood

Oil price

Very quiet yesterday but back up by around 80 cents this morning on not much news. G Sachs changed their oil price forecast again, it must be days since they last did it, now they are going for $65 end of year on the ‘vaccine trade’, I wonder where that came from….

Retail gasoline prices today and they are creeping up, at $2.317 per gallon it is up 6.8c w/w, 15.9c m/m but still down 39.4c y/y.

Bahamas Petroleum

BPC announce Funding strategy: Reconciliation & exercise of put option this morning. This has raised a further £3.75m at 2p per share bring bringing total funding since August 2019 to $52 million, with current undrawn potential funding sources in-place for up to a further $20 million.

The company state that if remaining potential funding sources are available and drawn in full, this would represent successful completion of BPC’s current funding strategy, initiated in August 2019, securing a total of $72 million. This represents adequate funding to meet not just the costs of drilling the Perseverance #1 well (at 100% ownership, operatorship and control), but also the costs of an extensive 2021 work program on a suite of production, appraisal and development assets in three other complementary jurisdictions, as well as all geological and geophysical (G&G) costs across the business through to mid-2022.

As a reminder, Perseverance#1 is targeting resources of between 0.77bn and 1.44bn barrels of oil and the 2021 work programme is targeting exit production of c.2,500 bopd (2020 exit rate of 500 bopd).

Simon Potter, CEO of BPC, said:

“In August 2019, BPC embarked on a bold strategy to self-fund the drilling of Perseverance #1 in The Bahamas, as well as to seek to complement that high-impact exploration activity with production and thus cash generative assets. We knew it would require capital to facilitate such a growth strategy, and, accordingly, we laid out a clear plan as to how we would secure that capital incrementally over time.

Now, with drilling in The Bahamas well underway, and with a broad program of value-adding work about to kick off in Trinidad and Tobago and Suriname, we continue to draw on the various elements of the funding package we worked hard to put in place over the past 18 months. Today’s option exercise, to raise a further £3.75m, is consistent with that strategy.

Given the range of components to our funding, we are today providing shareholders with a clear reconciliation of our delivery against the funding strategy we articulated in August 2019. This represents, in our view, a transparent and accurate measure by which the Board and management should be held accountable.

We believe that the delivery of our funding package, and thus the portfolio-wide work program it supports, represents a considerable achievement when considered in the context of depressed equity markets (particularly in the energy sector), oil price weakness, and the material cost, timing and operational challenges caused by both Covid-19 and the last-minute – but ultimately unsuccessful – legal challenge to BPC’s drilling operations in The Bahamas.”


PTAL announces that it has ‘contemplated’ a $100m bond issue and with it supplies an operations update. The company ‘is pleased to announce that it has mandated Pareto Securities AS to arrange a series of fixed income investor virtual meetings commencing January 14, 2021’.

Subject to market conditions, a new USD 100 million senior secured three year bond issue may follow.  The proceeds of the potential Bond Issue will be used to settle in full the cumulative oil price difference liability owed to Petroperu (approximately USD 16.6 million – as previously announced); to finance the ongoing development of PetroTal’s flagship Bretana oil field in Northern Peru; to provide funds to support the Company’s hedging program; and to finance potential synergistic acquisitions.

Operationally the company updates but mainly with information already in the market. Production is 9,500 bopd and stabilising and is now around nearer 10,025 bopd and growing. Additionally recently the company announced that it had a pilot shipment of Bretana oil shipped through Brazil, today they confirm that they have signed for another shipment for February of up to 220,000 barrels of oil. The Brazil sales help overall economics and ‘complements sales to the Iquitos refinery’.

Should the bond issue be a success, and I expect it to go well, the company plans to resume drilling at Bretana as well as expanding the CPF 2 to take expected higher oil production in the near future. Things are most definitely picking up for PetroTal and I’m glad I found a spot for the company in the Bucket List.

Helium One

HE1 has announced advancement of its ‘aggressive exploration’ programme at the Rukwa project in South Tanzania with submission of key environmental studies.

David Minchin, Chief Executive Officer, commented:

“The Company is very pleased to be able to press ahead with its planned field activities in Tanzania, taking important steps towards our planned drilling programme in Q2 2021.  Drill planning is progressing on schedule with rig-selection and contract negotiation well advanced.  Submittal of the ESIA for drilling at the Rukwa Project is a significant milestone and the culmination of several months of fieldwork, baseline mapping and community consultation.”

And finally…

In last night’s final 3rd round game the Hammers got through to round 4 by beating Stockport County 0-1. In the 4th round draw the outstanding tie is Liverpool going to the Theatre of Dreams, Crawley go to the Cherries, Chorley get Wolves, Millwall v Bristol City will be a tough match god that there will be no crowd and Spurs go to Wycombe.

India drew the test match with Australia despite Steve Smith going back to his roots by scuffing over Pant’s guard during the drinks break, same old, same old….

(The opinions expressed here are those of the author, a columnist for Share Talk.)

Malcolm Graham-Wood

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Disclaimer: Malcy’s Blog is provided for general information about the international oil and gas industry and the companies that operate within it. It does not constitute investment advice and Malcy does not buy or sell shares, warrants or bonds in any company written about within the blog. Information is taken from publicly available sources and any comment is that of the author who does not take any third party comment in the blog

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